38) In a defined-benefit plan, the process of funding refers to
A. making the periodic contributions to a funding agency to ensure that funds are available to meet retirees ‟ claims.
B. determining the accumulated benefit obligation. C. determining the projected benefit obligation.
D. determining the amount that might be reported for pension expense.
39) In a defined-contribution plan, a formula is used that
A. requires an employer to contribute a certain sum each period based on the formula.
B. ensures that pension expense and the cash funding amount will be different.
C. defines the benefits that the employee will receive at the time of retirement.
D. ensures that employers are at risk to make sure funds are available at retirement.
40) The accumulated benefit obligation measures
A. an estimated total benefit at retirement and then computes the level cost that will be sufficient, together with interest expected to accumulate at the assumed rate, to provide the total benefits at retirement.
B. the pension obligation on the basis of the plan formula applied to years of service to date and based on future salary levels.
C. the pension obligation on the basis of the plan formula applied to years of service to date and based on existing salary levels.